You might be wondering if or how you can apply for a VA loan online. Maybe your local lenders are charging too much or rates seem too high. More than likely, you've found they don't seem to be as knowledgeable in VA loans as you would like. There are many reasons you would want to search the internet for your next VA loan. There are also some things to look out for as well. Here I will go over some benefits as well as pitfalls to applying for your new VA loan online.
Applying for a VA Loan Online - Watch Out
There are only a few things to look out for when searching for a VA loan online. I'm starting here because although the list is short, it can have a major impact on the entire process. Tread very lightly when doing your search. You should be even more weary when filling out applications that ask for social security numbers before you actually speak to a VA Loan Specialist.
Often times when filling out applications online, the home loan shopper doesn't take time to read the fine print. If you don't know or at least have some indication how many lenders will respond to your request, you could be in for a treat. You see the commercials. When lenders compete, yada, yada. What you don't know is that more than 4 lenders respond to these online applications. In some cases, you can get up to 12 or more lenders calling you.
Loan comparison sites make their money from selling your information to lenders. Of course, the more lenders they sell to the more they make. Add to the fact, sites that ask for your Social Security number generally pull your credit. Once that credit is pulled, other lenders with access to "credit pull alerts" now are aware you're shopping for a mortgage. Like cockroaches when the lights go out, these lenders seem to come from everywhere and can be hard to get rid of.
Be sure to get your quotes first before getting your credit pulled. Ask for their fees, their rate, if any points are required for that rate, the payment and the loan amount they are using for the quote. A fee sheet or Loan Estimate isn't required at this point. A lender asking for it before providing one themselves is one to watch out for.
Benefits to Applying for a VA Loan Online
This is an obvious reason but maybe you don't know why you would get a lower rate shopping online versus a local lender. Think about it this way... You go to your local department store to purchase a new watch but you swear when you were doing research, you saw the exact same watch for MUCH less on a major shopping website (I won't mention any names but it rhymes with Glamazon). This same concept applies to online mortgage shopping.
A local lender has to pay the bills just like a nationwide lender but does in most cases, 1/10th the business. So how do they make a profit? You guessed it! They have to charge more fees and higher rates.
Sure, being able to see a pretty face across a desk may seem appealing but is it really worth, sometimes, thousands of dollars to get that luxury? In almost every case, an online VA lender will charge at least hundreds of dollars less than a local broker. In some cases, a Federally Chartered VA Bank can cut off literally THOUSANDS of dollars either by not charging or by paying for your costs for you. Watch out though. There are a couple big online VA lenders charge quite a bit. Again, make sure to get the quote before they pull your credit. This will save you quite a bit of time.
There are times when you just want the loan and don't want to wait months and jump through hoop after hoop for an approval...okay, maybe every time. Here's the deal. Local brokers generally do not specialize in VA loans and as I mentioned earlier, don't do as much business as nationwide lenders. A VA loan is a very specific type of loan that has very specific guidelines. In addition, the appraisal process is much lengthier than a conventional loan. This could very easily end up in delays later in the process when it's simply too late to switch lenders.
When you apply for a VA loan online, a Federal Bank is generally your best choice. You'll get quicker approval and closing times due to a more well set and streamlined process. In addition, the volume of loans originated translates to discounts off of title fees as well as not having to charge fees themselves.